8/12/2009 -
Tire shipments are projected to drop by approximately 16 percent in 2009, mainly as a result of a nearly 45 percent decline in original equipment manufacturer (OEM) passenger tires and almost 43 percent drop in OEM commercial truck tires, according to the Rubber Manufacturers Association. Total 2009 tire shipments are projected to decline approximately 45 million units to 237 million units. This level is approximately 84 million units less than the peak of 321 million units in 2000. The decrease in tire shipments reflects the recent struggles of automotive manufacturers, low consumer confidence, high unemployment and depressed home values. Vehicle miles traveled seem to have stabilized and domestic economic conditions for both the consumer and commercial sectors appear to have bottomed and are poised for a rebound in 2010. The tire industry is expected to realize a nearly 8 percent growth in 2010, reaching the 260 million unit level. RMA’s Tire Market Analysis Committee forecast for key categories and their respective segments for 2008 includes: Original Equipment Passenger Tires: Large decreases in domestic vehicle production as a result of auto manufacturer production shutdowns and bankruptcy reorganizations will result in a nearly 46 percent decrease in 2009 shipments to approximately 21 million units. With the economy predicted to emerge from the recession in 2010, a rebound in vehicle sales and subsequent vehicle production is anticipated, which will result in a nearly 11 million increase in OE tire shipments in 2010. Note that this projection does not account for any changes to the auto industry as a result of further federal intervention or consumer incentive programs. Original Equipment Light Truck (LT) Tires: This category will experience an approximate 12 percent decrease, or 400,000 units, in 2009 to nearly 2.6 million units due to slower economic conditions and its impact on the commercial sectors which utilize light truck vehicles. There is continued consumer demand for vehicle fitments with p-metric passenger tires in place of LT tires, and as the economy gradually recovers in 2010, a nearly 100,000 unit gain is anticipated. Original Equipment Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: Given the downward revisions in the economic conditions in the commercial sector, a nearly 44 percent decline to approximately 2.2 million units is anticipated for 2009, a decrease of over 1.6 million units. The economic rebound anticipated for 2010, along with pent up demand for vehicles, is projected to result in a net gain of approximately 500,000 units increase in shipments. Replacement Passenger Tires: As a result of the protracted economic downturn and the onset of economic recovery pushed closer to 2010, the market will realize another decrease of nearly 9 percent, or approximately 18 million units, reaching a level of 176 million units. Growth is anticipated to resume in 2010 with the replacement sector estimated to increase by approximately 5 million units, or slightly better than 3 percent, in tandem with the projected economic growth in the consumer sector. Replacement Light Truck Tires: Although the number of vehicles for this market remains steady and largely represented by small commercial vehicles, further declines in economic conditions are forecasted to contribute to a nearly 18 percent decline in replacement LT tire shipments in 2009 to the 24 million unit level. An increase of nearly 8 percent is anticipated in 2010 in keeping with commercial economic forecasts. Replacement Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: The market will realize another decrease of over 3 million units in 2009 to approximately 12 million units as a result of the protracted recovery. Given the uneven economic rebound forecast for 2010, this market is expected to increase by less than 1 million units to nearly 13 million units. The Rubber Manufacturers Association is the national trade association for the rubber products industry. Its members include companies that manufacture various rubber products, including tires, hoses, belts, seals, molded goods and other finished rubber products.

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